Monday, July 27th, 2009
The largest advertising agencies had already cut more than 18,000 jobs by April of this year. And as the ranks of Madison Avenue’s unemployed swell, the job of finding relevant work has become a big challenge for ad executives.
“People are getting desperate,” says Amy Hoover, a vice president at Talent Zoo, an executive-recruiting firm that specializes in ad-industry placements. “Job candidates are asking me to submit them for jobs that offer less pay and less responsibility — just so they can be employed again.”
Ad people are used to jobs being eliminated when accounts shift from one agency to another. But rarely has the industry’s foundation seemed so shaky. Even before the Sept. 11 terrorist attacks, agencies of all sizes and shapes were already facing a bleak environment because of the slowing economy. The attacks have only exacerbated the problem. On Oct. 19, Kirshenbaum Bond & Partners let go 10 of its 50 employees at its West Cost office. On the same day, Omnicom Group’s TBWA\Chiat\Day disclosed that it had laid off 15 people from its work force of about 800. Other ad firms that have also issued pink slips recently include Interpublic Group’s Mullen/LHC, and Wieden & Kennedy.
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Category Advertising, Economy | Tags: Tags: Ad, Agency, Economy, Execs, Executives, Industry, Job, Market, Recession,
Wednesday, June 24th, 2009
The responses to a survey of 200 marketing and 100 advertising agency executives, conducted by RSW/US, a lead generation and business development firm, showed ad agencies to be slightly more optimistic than clients about the prospects for the economy and the advertising business over the rest of 2009.
Agencies participating in the survey, released in mid-May, included Leo Burnett, Mindshare and Bailey Lauerman. Clients included Ford, GE, Kraft, Lego and Lenox.
While 51% of each group said that the second half of the year would see at least some continued falls in ad spending, more agency respondents (42%) felt the economy had already hit rock bottom and would therefore start to improve over the rest of the year than clients (35%).
Mark Sneider, owner, managing director of RSW/US, said, “While it appears some of the worst might be over, it’s probably best if agencies try to do more with less in the short term.”
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Wednesday, April 8th, 2009
10 tips for the advertising industry during the economic downturn:
1. Don’t cut your prices - research shows that by discounting your brand during a recession it will take you 7 years to recover to your original price level.
2. Focus on your brand strengths (real not imagined!), and emphasise heritage and classic / traditional values - while the crisis is on people tend to hark back to the memories of the good old days.
3. Do exploit the fact that your competitors may have shrunk their advertising spending - you can rapidly win back mind share as well if you have the courage to act now. Then rely on your operations and product teams to keep you ahead long-term.
4. Brands that invest in marketing during a recession tend to gain market share when the recession ends. It might seem wrong to splash out on a new ad campaign when you are cutting staff, but if the message is right and the campaign is well executed, the investment will pay off in the long run.
5. Bundle up: instead of cutting prices on your top brands, offer something for free as an add-on to your core (non-discounted) brand. So if you happen to sell bags, don’t discount your bags but throw in a free keyring instead.
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Category Advertising, Economy, Marketing, Small Business | Tags: Tags: Advertising, Advertising Industry, Agency, Budget, Economy, Marketing, Recession, Tips,
Monday, March 16th, 2009
Q&A with Miles Nadal, chairman and chief executive of MDC Partners Inc., the world’s ninth-largest marketing communications firm.
Q:
How do you think ad agencies will need to change in order to meet the economic challenges ahead?
A:
The impact of the economy affects all business. Companies are by the day shrinking and they will be much more discriminating about how they deploy capital. Clients will be far more focused on where agencies put their resources — more focused on putting it into talent and spending less on overhead and non-productive costs. Clients will look at campaigns and strategies that produce results in the marketplace. An ongoing theme has been targetability and measurability of impact, of return on marketing investment.
But we have a $600-billion industry globally — no matter what the change is, it’s still an enormous industry and enormous opportunity. If you produce brilliant work, clients will ultimately beat a path to your door.
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Wednesday, February 25th, 2009
The current media and advertising recession will be more severe and more transformative than any one of the last 80 years. This will be a time when it won’t be just about how far down ad spending goes, but also about what media entities and even business sectors will survive.
Historically, advertising recessions have been 1-2 years in length and have been about a contraction in ad spending on measured media. Everyone hunkered down, altered pricing strategies, leaned on relationships and waited until the inevitable spending upsurge occurred. The advertising recession of 2008 - 2010 will be different. This time, entire structures on both the buy and sell side will collapse. The institutions that were developed and rigidified in the 20th century are clearly not mirroring the dynamic changes of the media marketplace in this new century. The advertising agency constructed in the second half of the last century no longer reflects the media reality of today. The same can be said of the hierarchical distribution channel specific media sales organizations. There are agencies and media properties that exist today that will either cease to exist or will survive in substantially altered forms by 2011.
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